US President-Elect Donald Trump Warns of Major Tariffs on BRICS Countries

US President-elect Donald Trump has issued a strong warning to the BRICS nations—an alliance of emerging economies—threatening to impose 100% tariffs on these countries if they attempt to create a new currency to replace the US dollar in global trade. In a recent social media post, Trump declared, “The idea that the BRICS countries are trying to move away from the dollar while we just sit back and watch is over… They can go find another sucker.”

BRICS Nations and the Push for a New Currency

The BRICS group includes China, Russia, Brazil, India, South Africa, and additional countries like Iran, Egypt, Ethiopia, and the United Arab Emirates. Some of the leaders in this alliance have been exploring the idea of creating a new BRICS currency as a way to challenge the dominance of the US dollar in global trade. However, internal disagreements have hindered progress on the proposal.

Trump, who has made aggressive trade policies a central part of his agenda, emphasized that the BRICS countries must commit to not replacing the dollar with a new currency. He warned, "We require a commitment from these countries that they will neither create a new BRICS currency nor support any currency to replace the mighty US dollar. If they don’t, they will face 100% tariffs and should expect to lose access to the US market.”

Trump's Tariff Strategy and Economic Leverage

During his campaign, Trump promised to implement aggressive tariffs as part of his economic vision. Some political allies have suggested that his recent tariff threats are more of a negotiation tactic than firm policies. Scott Bessent, Trump’s pick for Treasury Secretary, has previously commented that Trump’s approach to tariffs is based on an “escalate to de-escalate” strategy.

Republican Senator Ted Cruz also weighed in on Trump's tariff threats, noting that they can be an effective tool for applying economic leverage. Cruz pointed to past examples, such as tariffs on Mexico and Canada, which led to swift negotiations. In fact, Canadian Prime Minister Justin Trudeau made an unscheduled visit to Trump’s Mar-a-Lago estate in Florida recently, likely to discuss avoiding a potential 25% tariff on Canadian goods.

The Economic Impact of Tariffs on US Businesses

Trump views tariffs as a tool to protect US jobs, boost the US economy, and increase government revenue. He has argued that tariffs don’t burden American consumers, but rather impose costs on foreign countries. However, many economists dispute this claim, pointing out that tariffs are effectively taxes paid by US companies that import goods—not by the foreign companies exporting them.

Studies have shown that during Trump’s first term, many of the tariffs imposed on goods—such as those from China—were largely passed on to US consumers in the form of higher prices. While some of these tariffs remain in place under President Joe Biden, the broader economic impact has been felt by American businesses and consumers alike.

What Are Tariffs?

A tariff is a tax placed on imported goods. For example, a $50,000 car imported to the US with a 25% tariff would incur an additional $12,500 cost. These tariffs are typically paid by the importing US businesses, who then pass the cost on to consumers through higher prices. While tariffs are often promoted as a way to boost domestic production, their long-term impact on consumer prices and business costs is a key point of debate.

Source: bbc.co.uk